PFN coasts on River Valley

A fifth phase of drilling has doubled the size of the River Valley palladium deposit in northern Ontario, reports Pacific North West Capital (PFN-T).

Combined measured and indicated resources now stand at more than 18 million tonnes averaging 1.02 grams palladium and 0.34 gram platinum per tonne, plus 0.06 gram gold, 0.02% nickel and 0.1% copper. An additional 5.4 million tonnes grading 0.82 gram palladium, 0.29 gram platinum, 0.05 gram gold, 0.02% nickel and 0.09% copper are classified as inferred.

The update, provided by Derry, Michener, Booth & Wahl Consultants, is based on a cutoff grade of 0.7 gram palladium, similar to the original. Metal prices and recovery rates were excluded once again, so resources still represent in situ material.

Since late 2001, when the original estimate was tabled, Pacific North West has sunk 83 new holes, bringing the total number drilled to date to 221. Most were drilled into the Dana Lake North, Dana Lake South and Lismer’s Ridge zones, though only Dana Lake South and Lismer’s Ridge have grown in size, having been the main targets of the recent campaign.

The Dana Lake South zone now extends for 310 metres along strike and to 340 metres below surface. A 325-metre gap separates it from Dana Lake North, though two deep holes suggest the two are connected. Dana Lake North strikes for 450 metres, along which it has been intersected to a depth of 275 metres.

Combined, the two zones host 12.6 million tonnes averaging 1.11 grams palladium and 0.36 gram platinum, plus gold, nickel and copper. Dana Lake South is now the larger of the two both in terms of volume and contained ounces.

Total resources at Lismer’s Ridge now stand at 10.8 million tonnes running 0.79 gram palladium and 0.3 gram platinum, plus gold, nickel and copper. The zone, which strikes for 1.45 km and extends to 260 metres below surface, sits about 2 km southeast of the Dana Lake area.

Breccia unit

All three deposits sit near the surface, close to where the host intrusion (after which the property is named) contacts the surrounding country rock. The highest grades have come from the breccia unit.

Mineralization occurs mainly in the form of disseminated and blebby sulphides (chalcopyrite), with palladium and platinum being tied to tellurides and arsenides, such as sperrylite and merenskyite. Palladium accounts for about 70% of the contained precious metals; platinum, for 20%.

Metallurgical studies are still preliminary, but 77% of the palladium and 73% of the platinum were recovered from 13 composite samples tested in South Africa. Each weighed 4 kg, and all were ground so that 60% passed through a screen having 74-micrometre openings.

Also, a graduate student tested 1,934 kg of rock blasted from the Dana Lake zones. At minus 100 mesh, where 80% of the material passed through 117 micrometres, 74.1% of the palladium, 68.5% of the platinum, 22.5% of the rhodium and 73.4% of the gold were recovered.

Each deposit remains open along strike and at depth.

PFN is awaiting word from partner Anglo American Platinum (Amplats) (AAPTY-O) regarding the next phase of drilling, which is to begin in early November. The junior has budgeted more than 30,000 metres, which would make this the largest campaign ever carried out on the property.

In the meantime, crews are combing the intrusion for new showings. In all, PFN has sampled or drilled 7.5 km of prospective “contact-type” targets in 11 separate areas.

Of particular note is the Banshee Lake prospect, where seven of the latest holes were sunk. Mineralized intervals carried as much as 20 grams combined palladium, platinum and gold over half a metre.

The prospect, which is 600 metres west of Lismer’s Ridge, coincides with an induced-polarization anomaly that represents a faulted offset of the main mineralized breccia unit. The anomaly measures 600 metres long and is up to 200 metres wide.

PFN and Amplats each own a half-interest in the River Valley project, though the major can increase its stake to 60% by financing the project to production. Since mid-1999, Amplats has provided more than $4 million in exploration funding.

Amplats can also earn a 60% stake in the Agnew Lake palladium property, which is 120 km southwest of River Valley, on the other side of the Sudbury Igneous Complex. Agnew Lake also overlies a layered intrusion, commonly known as the Shakespeare-Dunlop.

To earn a 49.5% interest, Amplats must fork over $6 million by the end of 2004. It can raise this to 57% by tabling a feasibility study and to 60% by financing the project to production. Should that happen, PFN and Platinum Group Metals (PTG-V) would each fall to a 19.5% participating interest, whereas the original property vendors would retain a 1% carried interest and up to a 2% net smelter return royalty.

PFN, as operator, is in the midst of a $1.2-million exploration program that will include 10,000 metres of drilling. The first hole is being drilled to a depth of 1,500 metres to test a gravity anomaly outlined previously and to provide a stratigraphic picture of the intrusion.

Amplats provided $1.2 million for the first phase of exploration.